Services PMI dropped to 54.7 in September: The recovery slowed
• The purchasing managers’ index for the private service sector (Services PMI) fell by 2.6 points in September to 54.7 after an upward revision to 57.3 in August. This is the first time since April that the index dropped, but it remains in the growth zone for the fourth straight month. While individual monthly outcomes should be interpreted with caution, the trend in the Services PMI continues upward, in contrast to what we have seen in the eurozone, where the purchasing managers’ index has fallen in recent months, says Jörgen Kennemar, who is responsible for PMI analysis at Swedbank.
• The biggest negative contribution to the drop in the Services PMI came from business volumes and employment at a combined 2.7 points, where the subindex for employment reached the lowest index level since April of this year. A slightly negative contribution came from new orders, which remain at high index levels, while delivery times rose.
• Service companies’ business plans for the next six months were slightly more optimistic in September than in August and the index rose to 56.1, but the plans are far from as upbeat as before the coronavirus pandemic, when the index climbed over the 60 mark.
• Silf/Swedbank’s PMI Composite index fell to 54.9 in September from an upward revision of 56.3 in August. The Swedish private sector reported a robust recovery in the third quarter even though the trend tailed off toward the end, says Jörgen Kennemar. Manufacturing industry and the service sector showed an unwillingness to hire during the quarter.
The Purchasing Managers’ Index (PMI) is a business cycle indicator for the Swedish economy produced by Swedbank in cooperation with Silf. The PMI is produced for both the manufacturing and service sectors. The aim of the PMI is to get a quick measure of the current state of the economy. Each month purchasing managers are surveyed and an index calculated. An index level above 50 indicates expansion, while a level below 50 signals a contraction. The PMI for the manufacturing sector is published on the first banking day of each month at 8:30 am (CET), while the corresponding index for the service sector is published on the third banking day of each month at 8:30 am (CET). The survey for the Services PMI was conducted between 10–25 September.
Next publication of Purchasing Managers’ Index – Services and PMI Composite: Wednesday, 4 November 2020
Jörgen Kennemar, Swedbank Public Affairs, tfn +4670 – 643 83 29, firstname.lastname@example.org
Anna Sjöblom, Silf, tfn +4673 – 518 70 11, email@example.com